This is the Cato Daily Podcast for Tuesday, October 3rd,

2023. I'm Caleb Brown.

Comparative Advantage is a classic concept in economics,

but does it really apply to international trade?

Cato Adjunk Scholar Don Boudreau says, of course it does.

As part of Cato's defending globalization series, Boudreau tackles the ways in which our

comparative advantage can be short-circuited with short-sighted trade

and immigration policy. A refrain that we hear from people who are, let's just say, fans of domestic enterprise and

reshoring things that are currently done overseas or in other countries is let's bring it all home. We shouldn't depend on other

countries to do things for us that we easily can do here in the United States.

Yes, that is a refrain we often hear.

It is a refrain that reflects economic misunderstanding.

And the economic misunderstanding that it most reflects is a failure to grasp the very important principle of comparative advantage.

Just because you can do something doesn't mean you should do that something as opposed to doing

something else, earning income from doing that something else and then using that

income to purchase those other things from individuals who can produce those things at a lower cost than you.

You know, a typical example of comparative advantage, but it's one that works is, you know, suppose LeBron James can

type faster than anybody else in the world. Well, it would be pretty silly for

LeBron James to quit his job as an NBA basketball

store in order to work as a typist in a typing pool.

Whatever he needs typed his emails or his legal documents he earns a lot of

income playing basketball that's the task at which he has a comparative advantage

...